EpiPen maker finalizes settlement over government overcharges

Mylan will pay the government $465 million to settle accusations it overbilled Medicaid for EpiPens, an emergency allergy injector.﻿

Photo: Mark Zaleski, FRE

TRENTON, N.J. - EpiPen maker Mylan has finalized a $465 million government agreement settling allegations it overbilled Medicaid for its emergency allergy injectors for a decade - charges brought after rival Sanofi filed a whistleblower lawsuit and tipped off the government.

It's the second settlement with the Department of Justice that Mylan has made since 2009 for allegedly overcharging the government for its medicines.

A senator and a watchdog group both criticized the latest settlement for being far smaller than the amount Medicaid was overcharged.

Mylan, technically based in England but with operational headquarters near Pittsburgh, became a poster child for pharmaceutical industry greed for hiking the list price of EpiPens repeatedly. It raised the price per pair from $94 in 2007 to $608 last year, while experts estimate it costs less than $10 to produce one EpiPen.

Last September, a House panel grilled Mylan CEO Heather Bresch about the skyrocketing cost of the devices, which patients inject in the thigh to stop a runaway allergic reaction to foods such as nuts and eggs or insect bites and stings.

French rival

On Thursday, the Department of Justice disclosed that its EpiPen case began when Sanofi-Aventis of France filed a lawsuit against Mylan under the False Claims Act.

The law allows individuals and companies to sue on behalf of the government over improper charges to government programs and to receive a share of any money recovered. Sanofi is to receive about $38.7 million. The federal government and all 50 states will split the bulk of the settlement.

Sanofi made a rival auto-injector called Auvi-Q.

EpiPens have long dominated the market because of their name recognition and deals Mylan has made to get preferable or exclusive coverage from insurers and prescription benefit managers.

Rebates too low

According to the Justice Department, Mylan paid Medicaid, the joint federal-state health program for the poor and disabled, too-low rebates for EpiPens by improperly classifying the brand-name product as a generic. Drugmakers are required to pay Medicaid rebates of 13 percent for generic products it purchases, versus a 23.1 percent rebate for brand-name drugs, which cost far more.

Robert Weissman, president of the consumer watchdog group Public Citizen, and Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, both noted that the Health and Human Services Department's Office of Inspector General's investigated and concluded that Medicaid programs paid Mylan $1.27 billion more than they should have between 2006 and 2016.

"It looks like the settlement amount shortchanges the taxpayers," wrote Grassley, who authored parts of the False Claims Act.

Mylan agreed to enter a corporate integrity agreement requiring it to have intensive outside scrutiny of its pricing practices with Medicaid for five years.